Complete Overview: FHA Non-Occupant Co-Borrower Guidelines
- Philip Bennett (NMLS # 1098318)
- Oct 7, 2023
- 9 min read
Updated: Jul 24, 2025
If you’re having difficulty getting a mortgage, Bennett Capital Partners Mortgage Brokers can guide you through the FHA non-occupant co-borrower option, a smart path to homeownership. Backed by the Federal Housing Administration, this feature lets a trusted relative or friend co-sign your loan, smoothing the way to purchase or refinance.
In the sections below, we break down exactly how the guideline works and how our team can streamline the process for you.
Key Takeaways
✅ An FHA non-occupant co-borrower is someone who helps the main borrower qualify for an FHA loan by adding their income and creditworthiness to the application.
✅ FHA loans have benefits such as lower down payment requirements and flexible credit score criteria, making them attractive options for home buyers.
✅ Using a non-occupant co-borrower can boost your approval odds, enable you to qualify for FHA’s low down payment options, and share responsibility for mortgage payments.
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What is an FHA Non-Occupant Co-Borrower?
An FHA Non-Occupant Co-Borrower is a person who helps the primary borrower qualify for an FHA loan by adding their income and creditworthiness to the mortgage application.
Definition
An FHA non-occupant co-borrower is a person who helps the main borrower to get a mortgage. This person does not live in the house bought with the loan. They only give help to another person for their home loan.
Both the primary borrower and the non-occupant co-borrower are jointly and severally liable for repaying the entire loan, and the co-borrower must sign both the promissory note and the security instrument, which gives them an ownership interest in the property.
They must be U.S. citizens, lawful permanent residents, or non-citizen nationals with their primary residence in the United States, even though they will not occupy the home.
How it works
A borrower and a non-occupant co-borrower apply for the loan together. Both people fill out the FHA loan forms. They show proof of their income, work history, and credit score. The bank looks at both borrowers to make sure they can pay back the loan.
The primary borrower must occupy the property as their principal residence within 60 days of closing, while the non-occupant co-borrower may live elsewhere, and both are jointly and severally liable for the full mortgage obligation if any payment is missed.
Overview of FHA Mortgages
Federal Housing Administration (FHA) mortgages are a popular choice for buyers who want affordable financing and competitive rates, and Bennett Capital Partners Mortgage Brokers has access to multiple lenders so you can comparison-shop through one application.
These government-backed loans typically attract first-time home buyers due to their benefits including low down-payment requirement of as little as 3.5%, flexible credit score requirements and competitive interest rates.
One special feature of FHA loans is the allowance for non-occupant co-borrowers. This guideline provides an avenue for individuals who might otherwise struggle to meet stringent loan approval criteria on their own, hence increasing their chances of becoming homeowners.
With this option, a borrower can leverage the income or credit history of another individual, making it possible to qualify for an FHA mortgage despite bearing high debt-to-income ratios or limited personal income.
“I built Bennett Capital Partners on the belief that the right guidance can turn a ‘no’ into a clear path to homeownership. Pairing borrowers with a trusted non-occupant co-borrower is one of the smartest ways to boost buying power while keeping FHA’s low-down-payment advantage intact.” — Philip Bennett, Founder & Licensed Mortgage Broker
📞Call us today 1-800-457-9057
Understanding FHA Mortgage Rates
FHA mortgage rates are the interest rates charged on loans backed by the Federal Housing Administration (FHA). These rates can vary depending on various factors such as the borrower's credit score, loan amount, and current market conditions.
One important fact to note is that FHA loans have lower interest rates compared to conventional loans. This makes them an attractive option for borrowers with lower credit scores or limited down payment funds.
The use of a non-occupant co-borrower can also help borrowers secure a larger loan amount or potentially qualify for a lower interest rate. It's important for potential homebuyers in Florida to stay informed about current FHA mortgage rates when considering their options for financing their home purchase.
FHA Guidelines & Requirements for an FHA Non-Occupant Co-Borrower
To qualify as an FHA non-occupant co-borrower, you must be a U.S. citizen or have a primary residence in the U.S., meet credit score and income requirements, and follow FHA loan guidelines.
Find out more about these requirements to increase your chances of getting approved for a mortgage loan. Read on!
Must be a U.S. citizen or have a primary residence in the U.S.
To qualify as a non-occupant co-borrower for an FHA loan, you must either be a U.S. citizen or have your main residence in the United States. This means that if you're looking to apply for an FHA loan with someone else, like a family member or close friend, they need to satisfy this requirement.
It's important because it ensures that all borrowers involved in the loan are connected to the United States in some way. So, whether you're a citizen or have your primary residence here, you can still benefit from being a non-occupant co-borrower for an FHA loan.
Credit score and income requirements
To qualify for an FHA loan with a non-occupant co-borrower, there are certain credit score and income requirements. The primary borrower and the non-occupant co-borrower need to have good credit scores.
Additionally, they must meet the income requirements set by the FHA. These requirements ensure that borrowers and co-borrowers can afford to make their mortgage payments without any financial strain.
By meeting these requirements, borrowers increase their chances of getting approved for an FHA loan with a non-occupant co-borrower. It's important to note that both the borrower and the co-borrower share equal responsibility for repaying the loan.
Benefits of Using Non-Occupying Co-Borrowers for an FHA Loan
Using a non-occupant co-borrower for an FHA loan can boost your approval odds, allow you to qualify for the low 3.5 % down payment, and make both parties jointly responsible for the mortgage payments, helping you secure your dream home.
Higher chances of loan approval
Using a non-occupant co-borrower for an FHA loan can increase your chances of getting approved. This is because the non-occupant co-borrower's income and credit history are considered when evaluating the loan application.
So, if you have a lower credit score or limited income, having a non-occupant co-borrower can help you meet the requirements and qualify for the loan. Additionally, having a co-borrower means that there will be shared responsibility for making mortgage payments, which gives lenders more confidence in approving your loan application.
Lower down payment requirements
FHA loans have lower down payment requirements compared to conventional loans. With an FHA loan, you can put as little as 3.5% down on the purchase of a home. This is beneficial for borrowers who may not have enough savings for a larger down payment.
By requiring a lower down payment, the FHA makes it easier for more people to qualify and become homeowners. So if you're looking to buy a home in Florida and want to keep your initial costs low, an FHA loan with its lower down payment requirements could be a good option for you.
Shared responsibility for mortgage payments
When using a non-occupant co-borrower for an FHA loan, both the primary borrower and the co-borrower share equal responsibility for making mortgage payments. This means that if one person cannot make their payment, the other person must step in to cover it.
It's important for both parties to understand this arrangement and communicate openly about their financial responsibilities. By sharing the burden of mortgage payments, borrowers may be more likely to qualify for a larger loan amount or secure a lower interest rate on their FHA mortgage.
Conclusion
In conclusion, understanding FHA non-occupant co-borrower guidelines is essential for those looking to qualify for a mortgage loan. By adding a non-occupying co-borrower, borrowers have higher chances of loan approval, lower down payment requirements, and shared responsibility for mortgage payments.
It's important to gather necessary documentation, work with a qualified lender, understand the risks involved, and follow FHA loan guidelines when applying for an FHA loan with a non-occupant co-borrower.
Overall, adding a qualified non-occupant co-borrower can open the door to homeownership and unlock stronger terms. Ready to explore your numbers?
Apply with Bennett Capital Partners Mortgage Brokers today and let our FHA specialists craft a custom quote for you.
Commonly Asked Questions
What are FHA Non-Occupant Co-Borrower Guidelines?
FHA Non-Occupant Co-Borrower Guidelines refer to the rules set by the Federal Housing Administration (FHA) for mortgage loans involving a non-occupying co-borrower. These guidelines determine the eligibility criteria and requirements for obtaining a mortgage loan with a non-occupying co-borrower.
Who is a Non-Occupying Co-Borrower?
A non-occupying co-borrower is someone who is included on the mortgage loan but will not live in the property being purchased. They are responsible for the debt and share the financial obligation with the occupying borrower.
What are the Benefits of Having a Non-Occupant Co-Borrower?
Having a non-occupant co-borrower can be beneficial in multiple ways. It can help borrowers qualify for a mortgage loan that they may not be able to obtain on their own due to income or credit limitations. Additionally, it can increase the chances of loan approval and enable the borrower to secure more favorable interest rates and terms.
Can a Non-Occupant Co-Borrower be a Family Member?
Yes. Parents, grandparents, children, siblings, spouses, domestic partners, and even in-laws can all serve as non-occupant co-borrowers on an FHA loan.
Are Non-Occupant Co-Borrowers Required to Have Good Credit History?
Yes, non-occupant co-borrowers are generally required to have a good credit history, similar to the occupying borrower. Lenders consider the creditworthiness of both the occupying borrower and non-occupant co-borrower when evaluating the loan application.
Does a Non-Occupant Co-Borrower Need to Contribute to the Down Payment?
The requirement for a non-occupant co-borrower to contribute to the down payment depends on the loan type and lender's policies. However, having a non-occupant co-borrower can enable the occupying borrower to secure a loan with a low down payment, as little as 3.5% of the purchase price.
Can Non-Occupant Co-Borrowers Assist with Loan Payments?
Yes, non-occupant co-borrowers are allowed to assist with loan payments. However, the primary responsibility for making mortgage payments lies with the occupying borrower.
Are Non-Occupant Co-Borrowers Required to Meet Any Eligibility Criteria?
Yes, non-occupant co-borrowers must meet certain eligibility criteria. These criteria may include having a good credit history, a stable income source, and the ability to shoulder the financial responsibility of the loan.
Can Non-Occupant Co-Borrowers Assist with Qualification Process for an FHA Loan?
Yes, non-occupant co-borrowers can assist with the qualification process for an FHA loan. Their income, assets, and credit history can be considered when determining the borrower's eligibility for the loan.
Can Non-Occupant Co-Borrowers Have Ownership Rights to the Property?
Yes, non-occupant co-borrowers must sign both the promissory note and the security instrument, and they are typically added to the property title, which gives them an ownership interest alongside the occupying borrower.
FAQs
What are FHA Non-Occupant Co-Borrower Guidelines?
FHA non-occupant co-borrower guidelines are rules set by HUD for a loan program. These let a person who won't live in the home help another borrower buy it.
Who can be a non-occupying co-borrower on an FHA loan?
A family member, close friends, or someone related by blood can be a non-occupying co-borrower on an FHA loan to purchase a home.
Can having a non-occupant co-borrower affect my mortgage note?
Yes, with two or more borrowers involved in the purchase of the house, terms of the loan may change and payment is required from all borrowers as agreed in your mortgage note.
How do I add a non-occupant co-borrower to my FHA Loan application?
Contact your loan officer when applying for an FHA loan if you want to include someone else not living there who can back up your ability to pay off this debt.
Will adding another borrower give me access to maximum financing with less down payment?
Yes! With an added non occupying co borrower helping you qualify for the mortgage; you might get larger loans possibly even while making low down payments around 3%.
Is there any limit decided by HUD regarding how many people can share borrowing together in this kind of arrangement?
It's possible that certain factors could restrict sharing debts with others under these guidelines although generally they allow multiple parties joining hands on shared transactions like buying houses though but finally each case has unique considerations so make sure discuss details well before.
Philip Bennett
(NMLS # 1098318)
Philip is the owner and Licensed Mortgage Broker at Bennett Capital Partners, LLC (NMLS # 2046862). He earned a Bachelor’s degree in accounting and finance from Binghamton University and a Master's in finance from Nova Southeastern University. With more than two decades of industry leadership, Philip has successfully guided thousands of clients through complex mortgage transactions.
Learn more about Philip Bennett’s background on our Founder’s page. Whether you’re a first-time homebuyer or a seasoned real estate investor, we are here to help you reach your goals. Don’t wait - contact us today and let us help you find the right mortgage for your needs.
